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Business | July 10, 2012

Tessera wins key ruling in arbitration versus Amkor

International Court of Arbitration of the International Chamber of Commerce (ICC) issued an interim award in favor of Tessera, Inc. in its dispute with Amkor Technology, Inc.
The ICC tribunal confirmed that the Amkor license agreement had been properly terminated by Tessera, Inc. in February 2011. Based on a preliminary review of the interim award, Tessera, Inc. intends to seek an amount in excess of $125 million from Amkor.

"We continue to seek royalties for use of the Tessera, Inc. patent portfolio, which has delivered over $1 billion in revenue during the past decade," said Richard Chernicoff, president of Tessera Intellectual Property Corp. "We use litigation in those instances where we are unable to achieve reasonable agreements or where others breach their agreements with us. The current arbitration will bring clarity to the amounts that should have been paid by Amkor under the license."

“Although we are disappointed that the panel did not rule in our favor on all of the claims, we prevailed on the patents for which Tessera made the largest claims for royalties and we expect that the amount of the award will be well below the more than $400 million claimed by Tessera in the arbitration,” said Ken Joyce, president and chief executive officer of Amkor. “Furthermore, we do not expect that the final amount of the panel’s award will have a material impact on our liquidity, and we do not believe the ruling will interfere in any significant way with our ability to use our technology, conduct our business or service our customers.”

The current arbitration marks the second time the two companies have gone to the ICC to resolve the amount of royalties owed under the now-terminated patent license agreement. The first arbitration lasted three years and in 2009 resulted in an award to Tessera, Inc. of $64 million.

The interim award announced in the second arbitration, which began in 2009, contains factual and legal conclusions on which the tribunal will base one or more final awards specifying the amount of damages owed by Amkor. Under the rules of the case and of the ICC, the parties have only a limited ability to make public disclosures about the arbitration.

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